According to blockchain data, Binance processed almost $346 million in Bitcoin for Bitzlato, a cryptocurrency exchange allegedly involved in money laundering. Last week, Bitzlato's co-founder and majority shareholder Anatoly Legkodymov was arrested in Miami after being charged with processing $700 million in illicit funds. The U.S. Treasury Department's Financial Crimes Enforcement Network (FinCEN) described the exchange as a "primary money laundering concern" with possible ties to the Russian government.
"The Department worked with key partners here and abroad to disrupt Bitzlato, the China-based money laundering engine that fueled a high-tech axis of cryptocrime," Deputy Attorney General Lisa O. Monaco said in a press conference. "Today's actions send the clear message: whether you break our laws from China or Europe – or abuse our financial system from a tropical island – you can expect to answer for your crimes inside a United States courtroom," she added. It looks like stepping on U.S. soil was a lifetime mistake for Legkodymow, a Russian national living in China.
Now, the question is whether Binance will suffer from the fallout caused by yet another crypto scandal. According to the notice released by FinCEN, the giant was a top receiving counterparty by the total amount of bitcoins received between May 2018 and September 2022. The runner-ups are Hydra, the Russian language darkweb marketplace known for involvement in drug dealings and financing crime before having been shut down in 2022, and TheFiniko, another Russia-related entity and an alleged Ponzi scheme.
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In correspondence with Reuters, a Binance spokesperson declared that the platform had provided law enforcement with "substantial assistance" in the investigation of the Bitzlato case. The company refused to disclose details regarding its dealings with the Russia-related platform.